Minister McGrath Welcomes BUILD 2020 Construction Sector Report

Build 2020 gives an update on the construction sector as it emerges from the initial Covid-19 restrictions, as well as an overview of general trends in the sector and the latest public investment plans. The timely publication of the report follows the announcement this week of the July stimulus package which includes a significant increase in public investment for shovel ready projects to boost the sector.

While the full impact of Covid-19 on the construction sector will take some time to become evident, the latest data suggests that the sentiment in June returned to expansion for the first time in four months. Over 80 percent of construction firms were back trading in some capacity as of 28th June 2020. At the same time, 27,300 construction sector workers remained on the Pandemic Unemployment Payment as of 21st July 2020.

An efficient and sustainable construction sector is more necessary than ever in order to deliver the increased level of housing and infrastructure that will be required to support the country’s recovery from Covid-19.

This annual report seeks to contribute to the evidence base informing Government and the construction sector on the performance of the industry. BUILD 2020 assesses the industry’s capacity, as well as highlighting possible constraints, risks and opportunities.

Additional public investment has already been provided in 2020 in direct response to Covid-19 and through the recent July Stimulus. Public capital expenditure is planned to increase by 12 percent in 2021 to over €9.1 billion.

Minister McGrath said: “The Government has taken decisive action to support the construction sector by increasing public investment in this week’s July Stimulus package.

I welcome the findings of the report which suggest that the sector may now be returning to expansion after a number of very challenging months. Many risk and challenges remain, and it is important that we continue to monitor these over the coming period, in order to inform policy decisions and process such as the upcoming review of the National Development Plan.

I must also acknowledge some of the positive trends identified in the report, such as the increasing regional spread of constructions plans, as well as the positive productivity growth which the sector has demonstrated in recent years. These positive trends highlight the great opportunity we have to ensure Ireland’s recovery from the impact of Covid-19, by providing considered public infrastructure for all of our people. ”

In spite of Covid-19, public investment in construction in Ireland in 2020 and 2021 will remain among the highest in the EU. This investment is required for the development of new social, economic and climate infrastructure. Grasping these opportunities requires overcoming the significant challenges posed by Covid-19 as well as increasing innovation in the construction sector. Both Government and industry are undertaking a wide range of measures to address these risks.

The following four elements will continue to underpin the approach adopted going forward:

1) Increased Public Investment

2) Communicating effectively for industry confidence

3) Securing the skills pipeline

4) Driving productivity improvement

Micheál Mahon, chair of the Construction Industry Council, said:

“This report demonstrates the challenges that the construction sector has faced recently through the impact of Covid-19, but also its ability to rebound.

The partnership between industry and Government has been extremely important in mitigating the impact of Covid-19 on the sector to date. This report provides a valuable source of information as the industry in conjunction with Government via the Construction Sector Group plots a roadmap towards a sustainable industry through and post Covid-19.”

Tom Parlon, Director General of the Construction Industry Federation said “The CIF welcomes the latest Build Report arising from the critical work of the industry, Government and unions in enhancing the delivery of infrastructure in Ireland. This year has seen the solid progress between industry and Government in improving the efficiency of public sector clients and industry in delivering critical projects within the NDP. The Build Report shows how critical construction is to delivery of an economic recovery, employment growth, regional development, climate change goals and apprenticeship numbers. We will be front and centre in reshaping Ireland 2020 and building a sustainable Ireland 2040.”